The Industry Strategy Symposium 2010 Executive Panel will be a newsworthy event that you will not want to miss. Organized and moderated by Scott Landstrom (SCI Consulting), this year’s Panel will be unique, differentiated from previous Panel discussions for three key reasons:

First, the panel represents an unprecedented collection of the top executive talent in the North American Semiconductor Equipment industry, with 5 of the top 6 firms represented by the CEO or the top Operational Executive focused on this critical sector— a “critical mass” of the key decision makers representing nearly $10 billion in peak-cycle equipment revenues.

Secondly, Landstrom will ask the Panel to share its thinking on the evolving structure of the industry itself. He will ask challenging questions regarding how the fundamental business model required to be successful is changing versus historical norms.

Finally, seven industry “luminaries” will participate in quizzing the Blue Chip Panel via recorded video questions. They’ll challenge the Panel on this “evolving industry structure” theme from their experienced and knowledgeable perspective.

“Blue Chip” Panel Composition

The phrase “Blue Chip” was coined by Oliver Gingold of Dow Jones in 1923 from its use in casinos, where blue chips represent the greatest value. The term has been in use ever since. By any standard, this year’s stellar collection of the top executive talent in this sector qualifies for the “Blue Chip” categorization. They are as follows:

David Dutton, president and CEO, Mattson Technology

Steve Newberry, president and CEO, Lam Research

Rick Hill, chairman and CEO, Novellus Systems

Randhir Thakur, senior VP and GM Silicon Systems, Applied Materials

Mark Jagiela, president, Semiconductor Test Division, Teradyne

Rick Wallace, president and CEO, KLA-Tencor

Industry Luminaries Will Quiz the CEO Panel

Landstrom has recruited prominent industry luminaries to ask the panel one critical question via recorded video. Luminaries include: Paul O’Neill, former chairman and CEO of Alcoa and U.S. Secretary of the Treasury; T.J. Rodgers, founder, president, and CEO of Cypress Semiconductor; George Needham, chairman and CEO of Needham and Company; G. Dan Hutcheson, chairman and CEO, VLSI Research; Jim Morgan, chairman Emeritus at Applied Materials; John Osborne, former Board of Director at Electroglas and current director at Amkor Inc.; and Bob Boehlke, former CFO at KLA-Tencor.

Tougher Questions than Previous Panels

Landstrom ascribes to many of Harvard University professor Michael Porter’s theories on competition, strategy, and how competitive “vectors” drive industry behavior. He is interested in the structural and competitive analysis of industries (“Porter’s five forces”) as well as strategic decisions which businesses and firms can take to adapt to an evolving set of industry competitive dynamics. Topics that he will ask the panel include:

The Productivity/Wafer Size Conundrum: When the industry shifted from 200 to 300 mm wafers, many tool suppliers kept the same wafers-per-hour output, yet the market would only bear about a 30% price premium. This has clearly contributed to declining CAPEX growth rates since that transition. What can be done to avoid the same experience for the Semi equipment industry when 450 mm finally arrives?

Market Concentration Trends: Ten years ago, the top four CAPEX spenders accounted for 28% of the total market. In 2009, they account for about 66% of the market, a significant increase in what Porter has termed the “Concentration Ratio.” A significant pricing power shift towards such powerful customers seems inevitable— negatively affecting gross margins of equipment suppliers. How real is this shift of negotiating “leverage” and what steps can be taken by equipment firms to offset it?

The Shift of the “Center of Gravity” of the Industry: For ten years, an ongoing shift in the “center of gravity” of the customer base has occurred away from the U.S. and Europe, and towards the Pac-Rim. Is U.S. technical and logistical superiority in this field enough to maintain our share of the overall Semi Equipment market versus locally based, less regulated Asian competitors?

Innovation Sources and Growth Engines: The recent financial crisis weathered by this country has hit the VC industry hard, and qualifying for an IPO exit strategy has gotten tougher. How will the role as “innovation engine” that has historically been played by U.S. “start-up” technology firms play out in a much tougher funding and “exit” environment?

Diversification….Necessary Going Forward? Historically, semiconductor equipment suppliers have generally stayed away from major initiatives into adjacent markets. With an IC long-term growth rate now acknowledged at close to half the historical rate, will diversification outside of Semiconductor now be an essential part of your plans to maintain earnings growth rates

Industry Consolidation– Must it Accelerate? In our economic system, “monopolies” (overly concentrated producer base) are virtually illegal, yet “monopsonies” (overly concentrated buyer base) are not. Given the trend toward a monopsony-like structure of only a few large customers, must the Semi equipment industry accelerate its pace of consolidation in response?